Monthly Metal Review
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
April ended with now predictable uncertainty in the Eurozone. Anxiety producing bumps in the road this time around include concern over the outcome of the French presidential election, The Netherlands' coalition-government collapse, Britain's double-dip recession, and caution over gasoline and Eurozone debt problems.
Notably in Spain, Standard & Poor's dropped the country’s long-term credit from A to BBB-plus. The euro shed half a cent on the news. BBB is investment-grade, but will make borrowing more expensive.
Equities bounced back toward April’s end, buoyed by a healthy global corporate earnings season and market satisfaction with quiet actions by the US Federal Reserve. Stocks remained higher in April and United States Treasury yields inched up, helped both by predictions from the Fed that the US economy will improve gradually in the coming year and a Fed promise to hold interest rates at record lows through at least 2014.
Leading commodity hedge funds were bullish on industrial metals, reportedly expecting a stronger global economy in the second half of the year to lift the likes of copper and iron ore.
China's first quarter 2012 growth data showed the economy expanded 8.1 percent from the same period last year. Much of the rest of the world would welcome growth that dynamic, but China had hoped for 8.4 percent growth. Rocketing borrowing rates have tempered 2012 growth, now targeted at 7.5 percent. With Beijing concentrating on domestic demand, China needs stunning amounts of raw material. Analysts say China is still the future for miners, especially with turn of financial liberalization.
The central bank reported that Chinese banks issued $160 billion in loans in March, well above expectations. Consumer products like appliances and cars for billions of new consumers will require metals for production.
The LME may let traders settle contracts in Renminbi, the official Chinese currency, as China accounts for more than 40 percent of global demand for most metals and an increasing share of trading in LME futures. Settling and clearing trades can currently be done in euro, yen, or sterling. The exchange will keep its benchmark dollars but members are asked if they want the Renminbi added and sterling dropped. China's central bank let the Renminbi fluctuate more against the dollar during daily trading; as much as 1 percent against a bank-fixed benchmark. The former limit was 0.5.
In London at mid-month, crude oil fell to near $102 a barrel after negotiators said meetings over Iran's nuclear program began on a positive note, easing tensions that sent crude higher. The sides agreed to meet again May 23 in Baghdad. Concern that a military strike by Israel and the US against Iran's nuclear facilities would disrupt global crude supplies helped push crude up from $75 in October.
A display at the British Museum in London showcases stories of the 4,700 gold, silver, and bronze medals to be won this summer at the Olympic and Paralympics games. Four 400-gram gold medals designed for the 2012 games are part of the exhibition, from gold provided by Rio Tinto and crafted by the Royal Mint. The exhibit also includes shavings, ancient medallions, molds and award objects from past games.